Budget 2024: Government Pledges to Build 1.2 Million New Homes in Five Years

About $6.2 billion will go into the initiative.

Australian Treasurer Jim Chalmers speaks at a press conference inside the Budget lockup at Parliament House in Canberra, Australia on May 14, 2024. AAP Image/Lukas Coch

The federal government has announced $6.2 billion to build new homes in the 2024-25 federal budget to try to deal with Australia’s housing shortage.

The budget aims to cover an “ambitious” promise to build 1.2 million homes in five years. The funding adds to Labor’s $32 billion spend on housing since 2022.

Federal treasurer Jim Chalmers touted the government’s plan as “ambitious but achievable if we all work together and if we all do our bit”.

Mr. Chalmers said more homes would bring prices down.

“The current housing pipeline is backed up,” he told Parliament on May 14 evening during the release of the budget.

“We’ve already allocated $3.5 billion to address bottlenecks and slash red tape, and this budget includes another $1 billion to help states and territories build more housing sooner.”

There will be some relief in the budget for renters, with $1.9 billion to boost the rate of Commonwealth Rent Assistance for low-income earners, increasing it by more than 40 percent since May 2022, including indexation.

“Rising rents are another big part of the inflation challenge, and we’re supporting renters who need our help,” Mr. Chalmers said.

As part of the overall plan to address housing shortages and free up homes, universities will be required to increase their own supply of student accommodation.

The federal government will also double funding for social housing and homelessness services by $400 million annually, an amount that states and territories will be expected to match.

Plans are also underway to increase access to fee-free pre-apprenticeship programs, with an $88.8 million spend on 20,000 new study places across all courses.

A $4 billion joint investment with the Northern Territory government will help address issues with overcrowding in remote community accommodation.

The government will rely on a discount to foreign investors to encourage development of “build to rent” housing, essentially, new builds created with the specific intent of becoming long-term rentals.

High Percentage of Income Going to Rent

A survey conducted by InfoChoice in February showed that 7 out of 10 Australian renters were paying more than 30 percent of their gross income on rent, with more than two-thirds having to modify their lifestyle to afford their lease.

The survey of more than 1,000 Australian renters found that high interest rates and a dire property shortage were the catalysts behind the figures.

Data revealed homelessness was now a concern for more than half of Australia’s renters, with Australians born between 1946 and 1964 the most worried.

An overwhelming majority of renters in the survey—96.2 percent—said the government needed to do more to make housing more affordable.

Renters in the survey called for more public housing, a crackdown on Airbnb-style businesses using short-stay rentals, empty nesters to downsize, and for reduced immigration.